When Majlis rejected to ratify an agreement which gave exclusive oil rights to the British, Percy Loraine became ambassador to Persia. He had served in Tehran from 1907 to 1909 and knew both Turkish and Persian. The British made a treaty with Sheikh Khazal, the governor of Khuzestan and assured him financial and military support against the central government. Sheikh Khazal formed an alliance with the Bakhtiari, Lor, and Khamseh tribes and dominated the eastern and northern regions of Khuzestan before staging an uprising in 1921, thus creating the greatest challenge to the newly formed government of Tehran. The British planned to create as many puppet Sheikhdoms in the Persian Gulf as possible. Reza Khan did not give in. He sent his military commanders to the region in January, 1925 and asserted the state authority with a royal order. In April, General Fazlollah Zahedi was appointed to start negotiations with Sheikh Khazal. The Iranian delegate was spending the night in a yacht anchored on Arvand river near Khorramshahr, when Later that night, a gunboat approached and Iranian special forces silently boarded the yacht. They immediately took the guards under control and arrested Sheikh Khazal. After taking him to the military base in Ahvaz, he was sent by car to Tehran. Reza Shah proclaimed king in April, 1926. He quickly liquefied Sheikh Khazal's properties and abolished the Sheikhdom of Arabestan which was to be thereafter called Khuzestan. Sheikh Khazal was given a luxurious residence in Tehran but he was ordered not to leave the city. Although the British started speculating about his death in 1936 at the age of 73, they knew their petro-political plans had failed and dreams of a Sheikhdom were shattered.